Australian Financial Review: Antipodes says disruptors distract from main tech game

Investors should not get become distracted by “disruptor” technology stocks, says Jacob Mitchell, Founder and Chief Investment Officer at Antipodes Partners, who believes that incumbents remain the strongest investment options. 

Speaking at the Pinnacle Investment Forum on Tuesday, Mr Mitchell said more established technology stocks, including companies such as SAP, Microsoft and Cisco, had a market advantage over newer companies.

“You know what these businesses are. They have significant pricing power and each of them, whether it’s Cisco and Microsoft, are basically using that lock to add additional features to their offering,” he said.

“We think you are better off, in the bubble of growth that we’re currently living in, finding an incumbent that is actually getting stronger.”

There was more value to be found in some of the older stocks too, he added.

“We’ve looked at the valuation across the top 10 enterprise software companies in the world and they’re trading on 21 times free cashflow. Our stocks on average are below that, they’re even cheaper and we’re taking the best out of the group.”

Click here to read the full article on The Australian Financial Review

13 February 2019